11.1. The corporate context of CI E

The company is a French industrial group, with an international footprint. This group operates around the same main core profession which comes in a variety of forms linked to an industrial rationale. According to CI E’s manager, the group has a lack of notoriety with the general public, but he states, “On the other hand, our shareholders have always eagerly held an exchange of views around innovation! Moreover, this explains why the group has reinvented itself several times through the means of technological innovations”. The observation formulated by the CI manager translates into an affirmation (in literature, a “hard fact”) which will in particular be of use within the problematization stage, that is, the reasons which legitimized the CI’s launch and existence, as well as its necessary interactions. In the following, you will see that this problematization stage consists of the elements on which the CI manager would gradually capitalize, legitimizing its actions and revolutions. This context will serve as a backdrop for managerial work produced by CI E’s manager.

A further element to this backdrop is to state that the group is familiar with open innovation (OI). According to CI E’s manager, “For about ten years we have worked the open innovation lever hard! Firstly within the R&D team and then within the entire group”. A priori, as you imagine, I was thinking that the natural tendency and this familiarity with OI may have facilitated the development of the CI, but this is not the case. In any case, this will not exempt the CI manager from having to influence their environment. CI E, as an entity, is a form of breaking off, a new paradigm within how to devise relationships with external businesses, and this is so, although the R&D teams were used to working with a multitude of industrial and academic partners. This paradigm is new in the sense that it affects a portion of smaller external partners and that, on the contrary, this time it affects a relationship of co-development and commercial partnerships and not a traditional customer–supplier relationship.

My exchanges with CI E’s manager, as well as secondary data, enabled me to retrace the genesis of the group’s “openness”, and the development of relationships with external partners. It was in particular at the beginning of the 2000s that the first OI initiatives were launched by the group’s R&D team. The company had to wait for the beginning of the 2010s, for a corporate venture structure to appear and the creation of the CI. The creation of these two structures and plans translated the management’s willingness to systematize the OI approach within the group. Their specificity compared to what existed at the time lies – you will by now have understood – within the nature of partners referred to. The issue here is start-ups, with smaller, more fragile, and also more agile structures than the partners with whom the group was used to collaborating.

This initiative was led by three members of the group management committee, conscious of transforming the organization with a twofold objective. On the one hand, the group now aims to develop its digital culture,

“I believe that we are genuinely having an impact on the digital section which is tackled through organizational initiatives…The group is in the process of restructuring completely within this sphere! For our part, we are identifying and extracting talents and skills, which are in the process of exploding everywhere within the group…we are striving to structure all of that…we are forced to submit proposals and we wish to assist the management to have a strategic digital vision!…There is already a real impact…Quick Wins… projects that we have led, that we have forced to ‘pivot’…for which we can measure performance! We will improve our approach to this in the coming years!”

On the other hand, CI E’s manager indicates that the group aims to strengthen its relational fabric with external partners,

“…We have worked hard on the corporate venture funding and on the CI. The activities of these two structures are developing fairly well although the activities remain even more marginal compared to the remainder of the activities…these clearly ought to be two strategic levers for the group”.

It therefore appears, beyond the image issue that the groups themselves frequently bring up, that the launch of CI E is also clearly associated with strategic and transformational issues. The development of a digital culture is faced with being a means to reinforce the group’s networking with its ecosystem.

Table 11.1 sets out the main key elements that enable the characterization of the corporate context in which CI E develops. These elements in particular translate representations created by CI E’s manager, which will direct his managerial work.

11.2. CI E players

The team which is directly attached to the incubator consists of several branches including those hierarchically attached to the CI and other such branches that are functionally attached. We must note that in this case, the CI team is fairly substantial and varied.

As the conversation progresses, CI E’s manager will put forward a significant characteristic linked to the organization of the CI itself, the latter being supposed to embody a new state of mind and serve as a vector for change within the group. He says,

“Nowadays the CI has become a genuine space for interactions! My team works within a so-called ‘Open Space’…and that means to say that we are permanently interacting with people!…When you are at the CI, you are having a dialogue…within a state of permanent interaction!”

We are able to discern, within this statement, the willingness to make the CI a symbol of change, such a symbol being useful to establish the legitimacy of the CI within the group’s field. We will also notice that defining the CI as a space for interactions and a symbol for change is to acknowledge or affirm the resonance of a specific type of managerial work: the management of interactions and a given network.

CI E’s manager in particular distinguishes three types of main interactions, “Firstly there are interactions with the group’s strategic management, therefore with senior management! Next, there are interactions with branches of activities within the group…We assist them particularly within their strategic thinking! Lastly, the third type of interaction concerns the group as a whole and falls within the OI strategy…In that sense, we are genuinely assisting others…For example when a program director comes to see us, we are at his disposal to help him find the right start-up, and we help him in setting up a deal with the given start-up”.

The interactions discussed here concern various strata and group entities: senior management, the various branches and the group as a whole. These interactions are all moments of interaction with internal players. CI E might struggle to succeed if the team size were more modest. The size and method of organization of the team responsible for the CI enables it to cover a broad spectrum of missions that I will describe in detail, in the section devoted to “tasks and missions of the CI”. These contact zones, which are designated within field publications as Field Configuration Events (FCEs), all offer opportunities for legitimizing the group’s CI activities, that is, the opportunities for field activity configuration.

Concerning CI E interactions, the CI manager was eager to emphasize the relationship maintained with a group management team attached to the R&D team with responsibility for the “closed” innovation. The main purpose of this management is to innovate from a technological viewpoint to assist business transactions. For this purpose, it mobilizes resources and assets held by the group through the R&D team (using a heritage rationale). CI E itself is positioned within a rationale of complementarity, when compared to activities which this entity has responsibility for. CI E’s manager says, “Everything which comes out of the CI has the vocation of being recovered by this entity as the CI has no industrialization sphere”. CI E’s manager says that looking at the complementarity with the entity in question is a means of configuring the field of activities of the CI even further and legitimizing the role of the CI.

In addition, CI E’s manager emphasizes through the various examples the numerous interactions that it might have with support managements within the group. First, with communication players as: “…There is a genuine will to be top-down in how we communicate as an organization having a very high involvement from the MD”. For CI E’s manager, the issue is to win supporters, “…because now we need to find internal representatives, operations and research teams”. A further example is the relationship with the accounts department for which CI E’s manager had to explain, “Whether we can pay for partners for 80 days,…like when you work with a start-up, your costs represent perhaps 80% of its turnover, therefore that is to say that if you do not reward the business, the start-up will stop functioning”. Finally, the interactions with HR (human resources) explain new recruitment needs, “Listen, say I want someone who has done history and political sciences in Paris because I need to think on a human level and an engineer is no use to me in that regard”. Such requirements are not always understood by HR, as the question that crops up is that career to then offer such recruits in ten years’ time.

Doubtless calling upon freelancers would enable a response to such needs without placing HR in any form of difficulty. Might the style of the CI structure thus contribute in the end to certain employees being taken on? Certainly this is a further debate, but it is a trivial detail which suggests that the opening of companies to the external market for “business” and “transformation” reasons will not only lack the ability to question the profile of useful resources, but also their status. The end of wage-earners, predicted by many, has its sources within the many current phenomena including OI approaches.

To come back to our case, the examples of daily interactions prove to be extremely formative for the CI’s activity. Through these examples, it is appropriate to realize that managerial work lies not only with the players within the innovation system (strategy management, branches of activity and R&D). This is managerial work which will affect the group in its entirety and it is through this means that CI E’s manager ensures “these practices start to be understood”. However, CI E’s manager acknowledges that the opportunity provided to him to understand these practices relies in large part on the CEO of the group, as “when the boss says that the incubator is operating well, nobody will go against that. This is not necessarily out of conviction, it is right that people act as good ‘students’ within the group”. The effect of the “leader’s discourse” operates in a high gear within our organizations nowadays, which still remain steeped in a pyramidal hierarchy.

Independently of the usefulness of the “leader’s discourse” within the context above, we may ask to what extent does OI not call into question this sociology around “leaders” within large organizations. Indeed, for many, OI is based on both the relational aspect and external interactions. When you work with external parties and even more with start-ups which need you to respond to their uncertainties, it is very much in real time and that has more to do with your own personality and the words you use. Imagine that you are in the process of discussions with a start-up and you tell them at a given moment, “Excuse me for a moment, I must ask for the opinion of my ‘bosses’”. Beyond the fact that you might then impose on this start-up long, even deal-breaking decision-making processes for it, undeniably, you would de facto lose all credibility on a mission which is, that having been said, your own. It appears to me that faced with a start-up in real time, it is far preferable to speak, discuss and take stances which are both sensible and achievable on your part, whether or not they correspond to those taken by others (your “bosses”). This more widely postulates the problem of autonomy and trust granted by organizations to people working in OI, that is, people responsible for making start-ups return to within the citadels of large groups. It is simply a question of efficiency for the OI, extensively based on the credibility that those who operationally do it and the legitimate trust that they have a right to expect from their organization and their “bosses”. For example, it is indeed CI E’s manager, who through hard work, each day configures the CI’s field of activity by taking advantage of the benevolence of the senior management. It is a very strong alliance based on trust, and we will have the opportunity to appreciate this later.

11.3. The structure of CI E

CI E is attached to the R&D team and enjoys a large level of autonomy. This autonomy was gained from a three-stage development through which the CI gradually adapted its organizational methods. According to CI E’s manager, “Nowadays, the CI is almost autonomous! The CI has witnessed three major stages…At first, we were clearly assisting others (80% of my teams were working for the remainder of the group) and 20% on our projects! Within the second phase, a year after our launch, we worked with 80% of our staff on the four projects within our four strategic fields, and the remaining 20% working alongside! Within the third phase (a year later), I am trying to commit group resources: by obtaining more resources and being capable of projects with the intention of drawing upon our group competences, a distribution network, capital, a factory and a customer. The idea is really to capitalize, from now on, upon existing group resources”.

Faced with such developments, CI E’s manager was eager to state that “…this is not a vocation of change for change’s sake but simply that the structure needs to adapt if it wishes to succeed in generating value for the group”. In the case of CI E, these developments are not led by chance, but are the consequence of accumulated failed experiments by CI E’s manager with business units.

Indeed, CI E’s manager sets out a series of thoughts which it seems pointless to translate as they are so crystal clear. He says, “…It is difficult to involve business units in our dynamics and at the same time it is normal as this is not what we’re asking them for. To be approved by business units in the past we were never encouraged to innovate; they simply ask us to be efficient and to control risks. All innovation contracts, when they arrive, are about communication, but also inefficiency and uncertainty, with a highly negative impact on your operating accounts. Therefore as a good manager, it is not in your interest to push for innovation”. The manager of CI E adds, “…It is complicated because although you have the support of top management within the group, it will never place pressure on operations. That is to say that top management considers that operations have their own mandate which is theirs, and we have ours! In the view of the group’s top management it is down to us to manage…”. The conclusion of CI E’s manager was,

“…It is in understanding that we can say that we will not be having an impact if we are not responsible for what we yield. We started from the definition of strategic projects for which we take over the lead and where we can operate incubator resources, so as to move this question forward”.

It is therefore the belief in “the schizophrenia of large groups opposing innovation and efficiency”, which led to the adaptations which CI E’s manager made to the structure, and he is not the only individual to do so. Whatever this aim, as indeed the precedents reflect a situation observed within a multitude of large groups and if often shared under the mantle of open innovation managers, it is, however, appropriate to alleviate it by trying to provide a perspective which is certainly ordinary, but is, however, highly real. There are two ways to generate financial value for a company: earning money and avoiding losing it. Innovation entails risks because it is a question of displaying novelty for customers and therefore creating a new market which we have had no experience of, despite the business plans incorporating its future size. Many authors in behavioral economics will tell you that risk aversion (what I might lose) is always stronger than the desire to earn (what I can pocket). The company is made up of employees and decision-makers. It is therefore not surprising that innovation, itself synonymous with risks, leads to a certain suspicion on everyone’s part: employees and decision-makers alike. Moreover, if by any chance, this innovation is in addition driven by a fragile structure such as a start-up, then this does nothing to redress the problem. However, nations, as with companies, cannot advance without permanent innovation. That is etched in the DNA of the human race and we often speak of adaptations, which in fact hides the aspect of innovation evidencing nature or intellect (which boils down to the same thing). It assumes that individuals or groups of individuals work on making things happen.

To return to our case, all of the developments of CI E gave rise to an entire permanent managerial work to gradually legitimize the incubation structure towards greater autonomy. CI E had to produce autonomy to create innovation. Within this sphere, CI E’s manager confesses to have capitalized on being a member of the Executive Committee of R&D, a position which enabled him to “spread the word” regularly with the main decision-makers, to build a network of powerful allies who were benevolent for structural developments. Nothing ever seems to have been written about this.

Nowadays, its manager says,

“The CI has become a genuine business unit and is genuinely a start-up…we have changed the economic model three times in three years! We were originally supporting the growth of other organizations, then, we had our own markets, and now we are attempting to act as a lever! The model is therefore constantly dynamic. In that context, we are in the process of constructing a third element. We were a Think-Tank, an incubator, and now we are in the process of creating an accelerator! I am seeking to develop the model, and make it scalable!”

He, in particular, states,

“The genuine challenge for the CI: how should we integrate the various projects? I have few doubts as to whether we can generate business because there are interesting projects, high-performance teams and resources! The genuine question is the one you are asking…in other words: ‘How can we integrate this business (CI) within the parent structure?’ As I told you, there is a connection with strategy management…in other words the four projects which we chose were set out and discussed with the strategic management team! Nowadays, it is the group’s strategic plan! That is not to say that the plan will work…however it does tell us that the plan evolves within an environment of top executives and decision-makers. We therefore know that the projects we focus on make sense for the group, although not all will come to succeed, as some have very different business models to those the group is used to nowadays!”

The questions which are unique to it offer the incubator the possibility of deciding for itself by operating as a start-up, which may have the decision-makers of the group as its sponsors. However, coordination still appears necessary, indeed essential, as the CI has no other choice than to rely on group resources to integrate solutions derived from the start-ups. To cultivate player membership and guarantee its autonomy, significant communication work is carried out by CI E’s manager.

“Extreme massive internal communication – I have one or two requests from the Executive Committee which take place every two weeks”. Something CI E conforms to with delight, as one well imagines.

He goes on, “At the level of external communication, you have an extremely strong brand. There are members of the Executive Committee from CAC 40 groups which every week convert to corporate incubators as we have a bias which is slightly unique…”. This amounts to saying that these members of the Executive Committee become invaluable witnesses for the CI in its quest for legitimacy.

We might thus summarize the approach of this CI manager. Understanding that it is difficult to construct using the group’s business units, this CI manager has made autonomy a leitmotiv for his projects. De facto, his entity tends towards becoming a classic innovation structure, with the characteristic of working with start-ups, and its tasks and missions confirm this to us.

11.4. Tasks and missions of CI E

This structure has the objective of being “the group’s innovative radical structure”. The strong transversality of this CI, the result of a series of developments and adaptations has forced me to summarize the position aiming to extract the interviewee’s views as to his various objectives. Moreover, the implementation of his various objectives may demand different types of work.

The initial objective refers to “a mission of acceleration – which is part of Open Innovation”. This mission affects traditional R&D. The CI seeks to convince the R&D players that the OI might be an acceleration factor, in particular by identifying start-ups within the global ecosystem so as to accelerate their projects. With the R&D team, the corporate incubator “will create prototypes with start-ups”, via small Fab Labs¹ to transform ideas into projects. It will also mobilize the capital for corporate venture as a means of reassuring the R&D team and the branches of activity around start-ups: “We can assist you in categorizing the start-ups capable of such work; choosing the best and assisting (the corporate venture of the group) in having a shareholding in these start-ups”. The interviewee says that the construction of an identity network of people already convinced by the OI constitutes a crucial point upon which to move fast.

The second objective refers to “a shifting mission in which we assist given business lines in their 3 to 5 year strategic considerations by explaining to them how the world shifts, and that this may have an impact on their various markets”. This objective, which falls within consultancy, amounts for CI E’s manager to an opportunity to help change standards and beliefs of business units, for want of making them direct customers for start-up solutions.

The third objective, and indeed the main one, this time refers to “a transformation leader mission, which is the main CI mission…We must generate one billion euros in additional turnover by 2030 by positioning the group around businesses upon which it is not currently targeted these days”. Around this objective, the CI has both resources for strategic consideration and resources for market implementation. The CI favors this mission which offers it a large degree of autonomy. It anticipates the group’s future markets by capitalizing upon the velocity and the innovative nature of start-ups.

Briefly, CI E’s manager breaks down his relationships with start-ups into three types. Firstly, there is the task with the R&D team, hoping that by this means, in some cases, business units will be able to take advantage of that. The CI acts as the “Trojan horse” to start-ups via R&D teams. Secondly, there is the task of evangelizing business units about the significance of considering start-ups which are shaking things up. Start-ups become a tool. Finally, the CI manager is committed to his own projects with the start-ups, and in the end becomes a business line in its own right like any other. In this case, and going beyond the CI, it is the OI which is established as an entirely separate business line.

This range of approaches is not by chance, but indeed that of strategic thinking on the part of the CI manager, pointing to several observations, broadly confirmed by discussions with other CI managers. Making the business units subscribe to the work produced with start-ups is difficult. However, OI is a must for a large group that has no wish to be “uberized”. Some CIs, to avoid complex relationships with business units, can wish to themselves become business units, with the characteristic that products and services which may stem from their structure rest on start-up solutions. Whatever the business unit, we note the way that the configuration of field activities for a given CI can take a multitude of forms, according to the characteristics of its environment and the means available to it. Not all CI’s have the means available to CI E.

11.5. The tools of CI E

The interviewee made no mention of specific tools used by its CI. Additional research enabled me to identify the existence of press releases which we have studied, a website and a Twitter account. However, these traditional tools appear to be a very small part of the communication tools used in this case. The communication management teams appear to be particularly evident in the promotion of this CI, especially by opening the latter to a multitude of external decision-makers.

11.6. Summary of CI E

Among the groups studied as part of my analysis, this group appears to be the one which has the most significant historic relationship with external players and in particular start-ups. Indeed, by considering the OI in the broadest sense, this lever has been driven by the group within the R&D team for more than ten years. However, that did not give the CI E a natural operational legitimacy with business units. This aspect again stresses the need to produce sizable managerial work so as to inspire organizational change and facilitate the adoption of new innovation production methods.

In the case of this CI, it seems to have had a gradual movement which has led its manager to make the choice to exempt the CI in large part from the intervention of business units within its business sphere. Throughout the exchanges with this CI manager (and quotes that we have chosen to set out as shown) I had the feeling from the start that there was a definition process. Many elements in the interviewee’s remarks reflect the analyses and observations that enabled him to set out the problems to define and suggest the direction for the CI. This definition process did not take place unilaterally, but in interactions with business leaders and his knowledge of the group greatly assisted him in this regard. It is probably this work of concerted definition which enables the CI to act, together with various stakeholders, within a backdrop of choices assumed by management.

Each of the current missions of CI E’s manager will call upon a different type of work, according to the nature of the mission involved. A project involving internal and external construction networks was implemented in response to the objective to integrate start-up solutions with business units, in becoming a Trojan horse via the R&D team (upon which the CI depends). A project to contribute to changing beliefs as to innovation production methods is being implemented along with the business units, by taking a consultancy approach. As far as the mission to develop its own projects with the start-ups is concerned, it appears that the CI is in the same boat as a business unit. Around this mission, the work is closely connected to the evangelization among top management, and the position of CI E’s manager gives him the possibility of multiplying opportunities for exchanges with advantageous representatives. These are all opportunities to configure the company’s field of activities with the large group.

Willingly comparing itself to an internal start-up, this CI assesses that with each stage it completes, it generates a given number of “positive externalities” and that as a result, even if the business development objectives are not reached, “the corporate incubator will not necessarily be a negative investment for the group. Thus, it will remain something in terms of attracting talent, in terms of the ongoing discourse with analysts and in terms of group transformation”. In any case, the CI manager believes that within the digital sphere, he has caused “a shift in the product lines”. However, his ambition is far more significant than that as “he genuinely has the ambition to change the group’s destiny”. He wishes to do so within a timeframe of more than ten years, “the timescale to reach the billion-euro turnover mark”.

The CI already appears to be able to measure the image benefits that its activity brings to the group: “An image of innovation, of calling into question what is concrete, what is real, what can we really reach out and touch nowadays! Moreover this is also obviously reassuring for young talent, who are saying that this is not a commercial group which has simply remained asleep on its pile of euros and which is incapable of questioning a given number of aspects”.

These benefits, tangible nowadays in the eyes of the interviewee, do not stop there. Indeed, the CI is perceived very favorably on the part of top management, in the sense that for them, “the main quality in terms of value creation nowadays is linked to the fact that we are in the process of transforming the group”. However, this is an aspect that, in the view of the CI manager, is not within the scope of his mission,

“Our vocation is not one of evangelization. That is to say that we believe in a given number of concepts, we believe in intuition rather than analysis, we believe in very quick prototyping, we believe in the need to market products quicker and we believe in open innovation. We therefore, have a form of bias which we drive within our given project, and which spreads partially by capillary action to other structures and operations. This is not entirely sought after, but it is right to work in this way, and it can produce something similar, but that is not the aim. We do not seek to evangelize. Once again, we are not even sure ourselves that what we are pushing for even has a direction, it is simply what we believe! In our burden, there is no value in truth!”

To address these beliefs, the singularity of this CI’s approach is significant: exempting constraints from direct work with business units, while implementing in practical terms the OI as a new business unit for which the priority mission is to construct the future in partnership with start-ups. It is a sufficiently rare case, with regard to my observations, to be emphasized. Moreover, the interviewee concluded on a humorous note,

“What is interesting is perhaps what will remain. That is to say that we will not succeed in generating sufficient business to be viable over the long term but we will have an effect on the group’s capacity to make choices, through the irony of having brought new prejudices”.